Obamacare May Be Responsible for Latest Economic “Crash”
Since the Affordable Care Act or Obamacare has been in full-swing for some time now, the discussion – if there is any more discussion of it at all – will move out of the theoretical and into the actual. One of the first is analysis by Daniel Gross for The Daily Beast, which argues that Obamacare has “helped crash the economy,” but not in the ways which were predicted by its detractors.
The premise of Gross’s argument is that after three consecutive quarters of growth, America’s GDP “decreased at an annual rate of 2.9 percent in the first quarter of 2014,” according to the Bureau of Economic Analysis. Gross attributes this reversal to a decline in health-care spending, although exactly why this happened is still something of a mystery.
Gross speculates that perhaps “people were hording[sic] medicines,” “avoiding going to the doctor,” or “delayed going to see the doctor, buying medicine, or having procedures” until the early kinks in the Obamacare system were worked out. It also could have been that, simply, people were spending less on healthcare since they now had insurance and paid only a co-pay rather than the exorbitant fees from an uninsured emergency room visit.
So it is unclear if this is a sign of Obamacare working as it should or if it is portent of things to come. Writing for the Indianapolis Star Jeffery A. Singer of the Cato Institute offers a fair criticism of program when he writes that instead of “reform[ing] healthcare, Obamacare merely expanded health insurance” but is incapable – in its current form – of regulating costs.
While many critics call for a return to the policies of the past with respect to healthcare the real issue comes down to the first major casualty in the fight to make healthcare reform a reality: the Public Option.
The Public Option was, at least from a health insurance side, meant not to be a government takeover of healthcare but the primary method of cost control. Considering the way the rest of the program has taken shape, it would be naïve to think that this would have been the one thing the Obama Administration would have gotten perfectly right, but in theory it would have helped far more than it would have hurt.
If the government was able to offer a competitive health plan – in terms of both price and quality of coverage – it could have triggered cost-cutting across the entire industry.